In 2018, the Lipetsk SEZ Management Company demonstrated the fast pace of its infrastructure and marketing development. The Lipetsk SEZ sites in Yelets and Gryazi hosted 13 new investors with total investments of RUB 24.137 billion. PPG Industries Lipetsk and LITIKS Innovative Engineering Center already operating in the Lipetsk SEZ announced expansion of their projects.
Currently, the Lipetsk SEZ hosts 65 companies from 16 countries, with:
• RUB 195 billion in planned investments
• RUB 59.6 billion in investments actually made
• 4,100 new jobs
• RUB 83 billion in products
• RUB 11.6 billion in taxes and customs duties.
The ratio of federal contributions to the charter capital of the management company to tenants’ actual investments is 1 to 6. The ratio of federal contributions to the charter capital of the management company to investments planned by tenants is 1 to 20.
Twenty-three tenants have already launched production in the special economic zone. On 5 December 2018, Igor Artamonov, Acting Governor of the Lipetsk Region, held talks with Orlando Napoli, President of Fondital S.p.a, and handed him an official document certifying that the company’s new plant manufacturing radiators and heating boilers was commissioned officially. Following the meeting, the management of Fondital S.p.a decided to build a new foundry in the Lipetsk SEZ.
Last April Lamb Weston Belaya Dacha plant was officially launched. The project investments totaled RUB 8.7 billion, with 218 new jobs created. The plant is expected to reach its full capacity by late 2019 (about 200,000 tons of potato per year). The production technologies meet the strictest industry-related standards.
In September, Schlumberger officially opened a new hi-tech plant to produce electric submersible pumps, with RUB 3.8 billion invested in the project. A specific feature of the plant is highly automated production processes. The annual capacity of the foundry and the machining shop is 4,000 tons and 4 million parts respectively. REDALIT Schlumberger’s products are to substitute for imports and cover the entire demand for spare parts of electric submersible pumps used in mechanized mining projects in Russia and Central Asia.
There are 8 companies constructing their facilities at the Lipetsk SEZ sites in Yelets and Gryazi: – Doka Lipetsk (Austria) producing formwork and steel structures used in construction, with RUB 594.5 million in total investments
– Chance Enterprise (Russia) producing plant protection agents, with RUB 3,300 million in total investments
– BS Processing involved in rolled steel processing, with RUB 402 million in total investments
– Lipetsk Coffee Company (Russia), a coffee manufacturer, with RUB 220 million in total investments
– ALU-PRO (Italy) producing spare parts and accessories for translucent structures
– OBO Bettermann Production (Germany) expanding its production, transportation and storage of cable support, lightening protection and earthing systems, connection and fastening systems
– LANXESS Lipetsk (Germany) expanding its production of car tire components and tools in addition to other rubber products
– Bekaert Lipetsk (Belgium) expanding its production of steel cord, bead wire and Dramix steel fiber.
On 14 August 2018, the Lipetsk SEZ Management Company announced that engineering infrastructure of the Gryazi-based site was ready. This included roads, communications, sewerage, storm drainage, power, water, gas and heat supply networks which improved access to the site and increased its infrastructural capacity. Optimization and hard work of the expert team made it possible to reduce costs of infrastructural development from RUB 20.42 billion down to RUB 14 billion. Savings in budgetary funds allocated for the expansion of SEZ infrastructure totaled RUB 6.42 billion. The Lipetsk SEZ Management Company spent over RUB 600 million in its own funds on new infrastructure.
The Company built the grid control center to improve efficiency of infrastructure management and quality of technical services provided to the tenants. The operators of the grid control center are responsible for monitoring and remote operation of the utility systems around the clock, and processing of applications for maintenance and connection to the grid. The Lipetsk SEZ Management Company spent about RUB 13 million to build the grid control center, which is another advantage of the Lipetsk SEZ over its competitors.
The Company’s experts continue to increase the number of business-related services offered to tenants. Apart from comprehensive maintenance and repair of power, heat, gas, water supply systems and sewerage, the Lipetsk SEZ provides preventive maintenance and repairs of fire safety systems under contracts made with 10 tenants two years ago. Since then, no system failure or emergency has occurred at the facilities located in the Lipetsk SEZ.
The units that are under construction at the Lipetsk SEZ site in Yelets include road infrastructure, power supply networks, communications, water supply mains, sewerage, storm drainage, external lighting, and customs office at the vehicle checkpoint. A permit was obtained to put into operation the gas pipeline to the administrative and business center.
Throughout 2018, the Lipetsk SEZ Management Company was supervising the construction of Fondital, Redalit Schlumberger, Lamb Weston Belaya Dacha, BS Processing, Lipetsk Coffee Company, and Chance Enterprise.
Efficient performance of the Lipetsk SEZ Management Company was repeatedly praised by the local government and leading experts.
Following 2018, the Lipetsk SEZ won awards of the Global Free Zones rating in the Infrastructure Upgrades and Expansions categories.
In October, the Lipetsk SEZ was recognized for its performance among other special economic zones following the analysis of the Russian Accounts Chamber.
The Lipetsk SEZ Management Company also received a favorable review from the Russian Ministry of Economic Development following the annual assessment of SEZ efficiency.
The Company keeps monitoring its performance and looking for opportunities to optimize its business processes. In December, the Lipetsk SEZ launched a pilot project allowing new companies to file digital tenancy applications. The Expert Council tested the mechanisms for analyzing and approving new investment plans in a digital format. These digitalization initiatives speed up the project approval and tenancy application processes.
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